The understanding and involvement of the board of directors heavily influences the effectiveness of a corporate compliance program. However, while the board is expected to set the tone at the top and ensure adherence to ethical standards, many directors lack the necessary knowledge about compliance programs and the organizational culture they oversee, compliance and ethics professional Evie Wentink argues. This disconnect raises critical questions about how effectively the board can guide the company in navigating complex regulatory environments and fostering an ethical workplace. As the composition of boards evolves, with a growing emphasis on diverse experiences, the absence of ethics and compliance professionals in these discussions speaks volumes.
On average, only 7% to 8% of S&P 500 board seats change in a typical year, according to data from Spencer Stuart (thanks to Vera Cherepanova and her recent GWIC appearance for surfacing these important findings).
Nearly 60% of new S&P 500 directors possess financial expertise, according to 2024 Spencer Stuart data, reflecting the critical need for robust fiscal oversight in corporate governance. In addition to finance, the most sought-after expertise on boards currently includes technology and telecommunications, HR, business strategy, and legal and regulatory affairs; ethics and compliance professionals are not on the list.
Many S&P 500 companies are now prioritizing candidates with advanced degrees in fields like human capital, corporate governance, environmental science and public policy, according to a 2023 analysis. So while it’s true that many companies are beginning to consider board candidates with more diverse expertise (no doubt a good trend), these changes are not coming fast enough considering that so few seats change over in a given year.
Executives with other backgrounds have earned their seat in the boardroom; now it’s compliance’s turn — and the DOJ agrees with me. In 2024, the DOJ’s updated guidance highlighted the critical role of the board of directors in overseeing corporate compliance programs, emphasizing the need for boards to possess or develop expertise in compliance-related matters. The memo also highlights the importance of informed decision-making in compliance oversight, suggesting that boards with relevant expertise are better equipped to navigate regulatory complexities.
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Read moreDetailsBoards have long been expected to set the tone at the top, a requirement that is easier to fulfill if they already have formal training in compliance or related disciplines.
The question is whether the board of directors should change its bylaws to reserve a seat for ethics and compliance professionals at the table. I think the answer is yes. Currently, there is no universal requirement for boards to reserve a seat specifically for ethics and compliance professionals. However, the value of such expertise within governance structures is clear.
“Including compliance professionals on boards would send a strong message about an organization’s commitment to ethical conduct and provide critical oversight capabilities,” wrote Tom Fox almost a decade ago.
To be sure, the inclusion of compliance and ethics professionals on bodies like the board of directors often depends on the organization’s strategic priorities and governance philosophy.
In cases where boards lack a mechanism for carving out a permanent seat at the table for E&C professionals, mandatory ethics training for all directors should become standard, as it would further illustrate the board’s commitment to ethical leadership.
I recognize that board members often have demanding schedules and may not always receive the training to effectively implement, assess and comprehend the corporate compliance program and the organization’s culture. This education and/or experience gap can hinder boards’ ability to engage with the critical components of corporate governance.
Ethics, compliance and integrity training for board members is essential to ensure they can fulfill their fiduciary duties, adhere to regulatory standards and promote organizational accountability. Training programs tailored for boards focus on equipping directors with the knowledge and tools to oversee compliance programs, mitigate risks and promote an ethical corporate culture. These programs often address critical areas like fraud prevention, privacy laws, conflicts of interest and governance best practices.
Evie Wentink is principal at Ethical Edge Experts. She previously filled compliance roles at Konica Minolta and TOTE Group. 
